Impact of Globalization, International Trade, and Tariffs on Business

This assignment delves into the multifaceted aspects of globalization and international trade. It begins by defining globalization and its implications, highlighting both positive aspects like market access and innovation, and negative consequences such as environmental damage and job insecurity. The analysis then transitions to the international product life cycle, outlining its components and the stages products go through as they internationalize. The factor proportion theory is also discussed, explaining how countries specialize based on their factor endowments. Finally, the assignment examines the impact of U.S. tariffs, particularly those imposed by the Trump administration on Chinese goods. It explores the reasons behind these tariffs, their implications for domestic consumers, and the broader effects on trade and economic output. References from academic journals and online resources are included to support the analysis.

SHORT WRITTEN
RESPONSES

1.
Globalisation termed out as to increase rivalry and that can relate to product and services
cost and price, target market, technological adaptation and fast manufacture by the enterprise
(What is Globalization ? Meaning and it’s Importance, 2019). Therefore, this increases the
market share and also has profound impact on decision making process of managers. In the
simple words, globalisation is the process that defined as that world is becoming more
interconnected by the culture and trade exchange. Thus, it is the study that looks for the reason
for globalisation and its positive and negative influences.
It also has huge impact over the domestic commodities as Foreign direct investment
highly affects the economic growth that has had positive growth in wealthy countries. Thus, this
enhances in trade and FDI and this all results into higher growth rates (Shahbaz, Shahzad and
Apergis, 2018). Additionally, it can be stated that globalize state have lower increment in
government authority outlays and taxes and lower level of corruptness in movement. Therefore,
optimistic and pessimistic impacts of globalisation defined in following manner as are-
Positive impacts-
 Provide access to larger markets- Globalised countries and firms have access to bigger
customer base. To sell commodities in the country a firm needs to expand to other
regions for boosting sales in order to generate more profitability (Beumer, Figge and
Elliott, 2018).
 Innovation- The desire to make profitability has always been spur to expanded
innovation, trade and communication of ideas. Henceforth, the great ideas from leaders
spread more effectively and conveniently.
 Better quality and variety- the competition from differ countries drives firm to better
their commodities. Henceforth, consumers can have better quality commodities and
variety of commodities can also get enhanced.
Negative impacts-
 Environmental damage- It is term that led to enhance production for business to meet
out global demand. Enhanced production leads to have more natural resources and this
can be used up before they regenerated and tends to have negative impact on environment
(Asongu, Tanankem and Osabuohien, 2019). Within countries as developing the rules
and regulation are not that strict as developed countries.
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 Job insecurity- It provides double edged sword when its comes to job, This creates jobs
for people in developing countries who provides cheaper manufacturing jobs. For
example- the number of firms are setting up in china and India as the wage and
manufacturing jobs are cheaper that means there is less job opportunities ( Iheanacho,
2018). However, it can be concluded that globalisation takes job from one country and
provide it to another.
 Causes fluctuation of prices- enhancement in competition means business with best
value can win. Due to competition prices rates are always fluctuating, for example
country life the United states US comes up with reduction in their price many times for
same product coming from china. Therefore, fall in price will have negative impact on
the profits and this can leads to laying off workers.
2.
International product life-cycle is an abstract model that briefing how firm evolves over
time and across national boarders. This is defined as an theory that development of firm
marketing on both domestic and foreign platforms. Therefore, this termed out as a theory that
defines that how the product matures and declines as the results of internationalization (McCrae
and Sutin, 2018). Henceforth, the four components of international product life-cycle as are-
 Layout of the demand for commodities
 Manufacturing of commodities
 competition in internation markets
 Marketing strategy
On the other hand, it can be stated that marketing strategy of the firm is responsible for
the creating or innovating any new commodity. Thus, these elements are classified that based on
the stage of the commodities within the traditional product life-cycle. Hence, this stages are as
introduction, growth, maturity, saturation and decline.
Factor proportion theory-
This is termed out as an international trade defines that in a two country, two factor and
two commodity framework are endowed with varying proportion of differ factor of production.
Henceforth, there are some countries that have large number of the population and large amount
of labour resources. Therefore, the country who have large force of labour can able to produce at
lower cost with use of labour intensive model of production. It is the theory that is mainly based
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on the new and innovative modern concept of production that leads to enhances capital towards
the same level of importance and labour (b Nakatani and et.al., 2018).
Therefore, this termed out as two dimensional method that is inclusive of the labour and
capital. Henceforth. Technical adaption helps to determines the labour and capital combine to
make the product. In addition to this, the factor proportion is very useful in order to comparison
the production processes of goods. Hence, factor production theory is based on the two
assumptions as are-
If a country is relatively labour abundant must be specialised in the production of the relatively
labour intensive goods.
If a country is relatively capital abundant that it has be specialised within the production of the
relatively capital intensive commodities.
For example-
It can be stated that to make leather footwear is still the labour intensive process even
with the most sophisticated leather treatment and pattering machinery. Thus, some other
commodities as computer memory chips all required highly skilled labour workforce. Lastly, it
still more rely over the massive quantities of capital for development, facilities and production.
3.
What was the reason behind such decision.
The President of the United States has imposed tariffs on billion of dollars worth of
goods from around the world in particular china. Therefore, he has imposed 10% levy on $200bn
(£150bn) worth of Chinese products so far. In the month of may, he has imposed 25% tariff on
$325bn of other Chinese goods.
Trump has stated that the duty has been obligatory due to Chinese theft of U.S intellectual
property. He has also stated that the planned tariffs on the Chinese imports make the unites states
much more stronger and much more nation. Henceforth, this step of the Trump would be toward
imposing tariffs that led to enhanced concerns of global trade war. Therefore, the main cause
behind this was that Trump is applying pressure to try to force china to narrow the trade deficit
the gap between imports and exports within the two countries (He, Pan and Deng, 2018).
Additionally, he has also stated that the china buys fewer US commodities than US buys
from china. Thus, Trump has also accused Chinese firm of stealing US firms intellectual
property and they have called at that time for Beijing to alter its rules and regulations.
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What are the implication of such intervention on domestic customer.
Therefore, the impact of the Tariffs are defined in the following manner are as-
 Trade barriers such as Tariffs increase rates and reduction in available quantities of
commodities and services for US business and consumers. Thus, it results in lower
income, have benefited into reduced employment and lowering the economic output of
the country.
 Measures of the trade flows such as trade balance, accounting identities all are not to be
misunderstood to be the indicators of economic health.
 This imposed tariff to trade and investment has substantially contributed to the U.S.
Growth but the U.S. Still maintains duties against the several categories of the
commodities. Henceforth, this high tariff has mainly considered over the agriculture,
footwear and textiles (Hoda, 2019).
Henceforth, it can be concluded that Tariffs are taxes on imported goods U.S. Consumers
has ended up in paying more due to U.S. Importer have faced some of the increased cost.
Therefore, Tariff has encouraged U.S. firms to use domestic suppliers and labour to make
commodities because foreign products have become the more expensive (Ruiz Estrada, Park and
Apergis, 2019).
On the other hand, firms lay off their employees or enhances prices to recoup some of the
cost on the end. Thus Tariff has increased the price of the imported goods. In addition to this,
domestic producer are not forced to have reduction in the prices form increased competition.
This leads to domestic consumers are left paying higher prices as result.
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REFERENCES
Books and Journals
Asongu, S.A., Tanankem, B.V. and Osabuohien, E.S., 2019. Globalisation and female economic
participation in Sub-Saharan Africa. Gender Issues. Pp .1-29.
Beumer, C., Figge, L. and Elliott, J., 2018. The sustainability of globalisation: Including the
‘social robustness criterion’. Journal of cleaner production. 179. pp.704-715.
He, B., Pan, Q. and Deng, Z., 2018. Product carbon footprint for product life cycle under
uncertainty. Journal of Cleaner Production. 187. pp.459-472.
Hoda, A., 2019. Where Is US Trade Policy Headed Under the Trump Administration?. In 20
Years of G20 (pp. 81-92). Springer, Singapore.
Iheanacho, E., 2018. The role of globalisation on energy consumption in Nigeria. Implication for
long run economic growth. ARDL and VECM analysis. Global Journal of Human-Social
Science (E). 18(1). pp.10-28.
McCrae, R.R. and Sutin, A.R., 2018. A five‐factor theory perspective on causal
analysis. European journal of personality. 32(3). pp.151-166.
Nakatani, J and et.al., 2018. A graph theory-based methodology for vulnerability assessment of
supply chains using the life cycle inventory database. Omega. 75. pp.165-181.
Ruiz Estrada, M.A., Park, D. and Apergis, N., 2019. The Effects of Trump Trade Policy on
China’s Economic Performance. Available at SSRN 3418240.
Shahbaz, M., Shahzad, S.J.H. and Apergis, N., 2018. Globalisation, economic growth and energy
consumption in the BRICS region: The importance of asymmetries. The Journal of
International Trade & Economic Development. 27(8). pp.985-1009.
Online
What is Globalization ? Meaning and it’s Importance. 2019. [Online]. Available through :
<https://www.managementstudyhq.com/globalization-positive-negative-impacts-of-
globalization.html>.
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